Dhaka, Bangladesh (BBN) - The yields on treasury bills (T-bills) showed a mixed trend on Sunday, as banks continued to channel their excess liquidity into shorter-tenure government securities rather than longer-term instruments amid heightened caution in the financial market.
The cut-off yield—commonly known as the interest rate—on the 91-day T-bills edged down to 9.89 per cent from 9.90 per cent at the previous auction.
In contrast, the yield on the 182-day T-bills rose slightly to 9.99 per cent from 9.98 per cent. The yield on the 364-day T-bills also increased, reaching 10.00 per cent compared with 9.94 per cent earlier, according to the auction results.
The government raised BDT 82.50 billion on the day through the issuance of the three types of T-bills to partially finance its budget deficit.
Market participants said banks were increasingly cautious in managing their investment portfolios amid ongoing geopolitical tensions and uncertainty in global financial markets.
“Most banks preferred investing their excess liquidity in shorter-tenure instruments rather than longer-term ones, reflecting cautious portfolio management amid the ongoing geopolitical tension,” a senior executive at a leading private commercial bank said while explaining the latest market situation.
The banker also predicted that the current trend in government security yields may persist in the coming weeks, depending on liquidity conditions in the banking system and broader economic developments.
Currently, four types of T-bills—14-day, 91-day, 182-day and 364-day—are transacted through auctions to facilitate the government’s short-term borrowing from the banking system.
In addition to T-bills, five Bangladesh Government Treasury Bonds (BGTBs) with tenures of two, five, 10, 15 and 20 years are traded in the market to meet the government’s medium- and long-term financing needs.
BBN/SSR/AD